Watu Simu, a subsidiary of Pan-African asset finance firm Watu, recently crossed the milestone of financing over one million mobile devices in Kenya. This milestone, reached in under two years since Watu Simu’s entry into the mobile financing market, is a testament to the growing demand for affordable and accessible smartphone financing in East Africa. This demand is catalyzed by the increasing role of digital technology in economic sectors and the transformation of Kenya into a digital-driven economy.
Bridging the Digital Divide in East Africa
Watu Simu has been instrumental in bridging the digital divide by offering convenient financing solutions that make smartphones accessible to diverse customers. Their financing model, which includes a popular “Buy Now, Pay Later” (BNPL) scheme, has lowered barriers to smartphone ownership, particularly for low-income customers who may not have immediate access to funds. This model has allowed many Kenyans to access devices from premium brands, like Samsung, and use them as tools for economic empowerment.
Speaking about the recent milestone, Watu Simu’s Head of Growth, Kevin Michuki, highlighted the significant demand for sustainable financing models in Kenya and Tanzania. “Our millionth customer milestone confirms the growing demand for sustainable financing models like Buy Now, Pay Later products in the race to bridge the digital divide,” Michuki said. He emphasized the role of smartphones in enabling customers to participate in the digital economy, adding, “More than 70% of our clients are involved in digital enterprises, such as ride-hailing, online delivery, and marketplaces, where smartphones are essential.”
Expanding Economic Opportunities Through Smartphone Financing
The demand for smartphones among Watu Simu’s customers reflects the broader trend of digitalization in Kenya and other parts of East Africa. Kenya’s digital economy is growing rapidly, with a forecasted contribution of KSH 662 billion to the GDP by 2028, according to a recent GSMA report. The growth is driven by strategic policy reforms and the increasing adoption of digital services, particularly in sectors such as agriculture, manufacturing, and trade.
Watu’s asset financing model has empowered clients who rely on smartphones for economic ventures, creating a ripple effect of growth in various gig economy sectors. Ride-hailing drivers, delivery agents, online sellers, and freelancers all require smartphones to conduct their daily operations, connect with customers, and manage logistics.
By enabling over one million Kenyans to access quality smartphones, Watu Simu has not only promoted digital inclusion but also driven income-generating activities. With device prices ranging from KSH 45,000 to KSH 80,000, Watu Simu’s flexible financing options make premium devices more accessible, especially for those with limited upfront capital. This accessibility has opened up a world of opportunities for Kenyans to participate in the digital economy, enhancing their productivity and income potential.
The Impact of Smartphone Penetration on Kenya’s Digital Economy
Smartphone penetration in Kenya has continued to increase, with a noticeable growth recorded during the 2023/2024 financial year. Data from the Communications Authority of Kenya (CA) shows that at the end of June 2024, the country had 66.1 million mobile phone devices connected to networks, representing a mobile penetration rate of 128.3%. Of these devices, 35.2 million were smartphones, reflecting a penetration rate of 68.3%.
This increase in smartphone adoption correlates directly with the expansion of telecom infrastructure and a burgeoning demand for mobile-based services, including digital payments, e-commerce, and mobile banking. The Fourth Quarter Sector Statistics Report by the CA indicated a decline in feature phone acquisitions, down from 31.2 million to 30.9 million, while smartphone acquisitions rose by over one million within the same period.
The CA report confirms that smartphones are now the preferred choice for Kenyan mobile users, which aligns with the global shift toward digital connectivity and enhanced mobile services. Smartphones provide not only communication channels but also enable access to vital resources, including health information, e-government services, educational content, and financial services.
Sustainable Digital Transformation in Kenya and Beyond
Watu Simu’s accomplishment in Kenya is part of Watu Credit’s broader vision for digital inclusion across sub-Saharan Africa. As of 2024, Watu Credit serves over 1.5 million mobile device customers, a figure that underscores the vast untapped potential of the African mobile market. Watu has emerged as one of the fastest-growing smartphone financiers in the region, indicating a significant need for affordable device financing options.
The company’s impact extends beyond Kenya, with similar operations in Tanzania. By increasing smartphone accessibility, Watu is not only connecting individuals to the digital world but also supporting the larger African economic ecosystem. This ecosystem is characterized by a young and ambitious workforce, with a keen interest in leveraging digital tools to improve their livelihoods.
Government and Private Sector Partnerships Fueling Growth
Kenya’s impressive progress in digital transformation is supported by government initiatives and partnerships with private entities like Watu. The Kenyan government has been actively working to establish an enabling environment for digitalization through policies and reforms. By encouraging mobile penetration and digital services, the government is laying a foundation for sustained economic growth and resilience.
The GSMA report projects that Kenya’s digital transformation will lead to the creation of 300,000 new jobs by 2028, driven by digital adoption in sectors like agriculture, manufacturing, transport, and trade. The report further estimates that this growth will boost tax revenues by KSH 150 billion, funds that can be reinvested into digital infrastructure, education, and healthcare.
With the availability of mobile devices at lower upfront costs due to companies like Watu Simu, the adoption of digital services is expected to accelerate even more rapidly. This expansion will likely inspire other financial players to enter the device financing market, fostering competition and innovation. The ultimate beneficiaries will be Kenyan citizens, who will have a wider choice of financing options and access to even better devices and services.
Overcoming Barriers to Digital Access
While Watu Simu’s achievement is commendable, there are still challenges that hinder universal digital access in Kenya. High data costs, limited digital literacy, and uneven access to stable internet connections remain obstacles for many. However, initiatives such as the Universal Service Fund (USF), which is financed by the CA, are being implemented to bridge connectivity gaps in underserved areas.
In addition, digital literacy programs by both the government and non-governmental organizations are helping to educate Kenyans on how to use smartphones effectively and responsibly. These initiatives play a crucial role in ensuring that the benefits of digital connectivity reach all segments of the population, including those in rural and marginalized communities.
The Future of Smartphone Financing and Digital Inclusion in Kenya
As Kenya continues to embrace digital solutions, companies like Watu Simu are expected to play an increasingly vital role in enabling smartphone ownership. The benefits of digital inclusion go beyond personal convenience access to a smartphone means access to healthcare, education, financial services, and economic opportunities. For Kenya to achieve its digital transformation goals, partnerships between the private sector, government, and local communities will be essential.
Watu Simu’s milestone of one million devices financed is a powerful example of how accessible financing solutions can foster digital transformation and economic empowerment. By helping to reduce the cost barrier for smartphone ownership, Watu is enabling more Kenyans to participate in the digital economy, opening doors to employment opportunities and improving the quality of life for millions.
Looking ahead, the company’s model could serve as a blueprint for similar initiatives across Africa, where digital inclusion remains a priority. With strategic investments and continued innovation in financing, Kenya and the wider East African region can become a digital economy powerhouse, setting an example for emerging markets worldwide.
Through sustainable financing, Kenya is well on its way to becoming a digitally inclusive nation, where access to technology is no longer a privilege but a basic right for all citizens. Watu Simu’s achievements mark a milestone in this journey, underscoring the impact of affordable, flexible smartphone financing on Kenya’s road to digitalization.
